Question #44 of 48Question ID: 606797 Distributions from such an annuity are computed on a LIFO basis with the income taxed first. U.S. Securities and Exchange Commission. An annuity is an insurance product that promises to pay out income at a future date based on invested funds. Designed to protect against inflation. C)municipal bonds. 8 annuities provide a guaranteed rate of return, whereas annuities provide conservative to aggressive investments whose rates of return are not guaranteed. The money paid in will be returned tax free, but the earnings portion will be taxed as ordinary income. Listing tax-deferred growth as an objective for retirement income, which of the following investments is most suitable? Though its stated return might not be as high as the other choices potential returns, only a fixed annuity fits the objective and risk averse traits of this client. Periodic payment deferred annuity. If this client is in the payout phase, how would his April payment compare to his March payment? If the owner of a variable annuity dies during the accumulation period, any death benefit will: Her intent was to use the funds for the down payment on a house after graduation. The income was deferred from tax over the plan's life, so it is taxable as ordinary income once distributed. All of the following statements regarding variable annuities are true EXCEPT: A) variable annuities offer the investor protection against capital loss. Since , has paid out quarterly dividends ranging from $0.00 to $0.00 per share. Immediate life annuity. A) mortality guarantee. When the annuitization option is selected, each payment represents both capital and earnings. B) IPO. If the separate account of a variable annuity with an AIR of 4% had actual net earnings of 8% in March, the April payment will be higher than the March payment. While variable annuities have greater potential for earnings, since their interest rate rises and falls with their underlying investments, they can lose money. When the second party dies, all payments cease. C) annuity units. B)a lifetime withdrawal benefit (LWB) or lifetime income benefit will make a periodic payment even if the account balance falls to zero For this potential advantage, the investor, rather than the insurance company, assumes the investment risk. C) IRAs. A variable annuity is a type of annuity contract in which the value can vary based on the performance of an u . \text{Salaries:} && \text{Deductions:}\\ An example would be if a life annuity with 10-year period certain contract holder died after 5 years, payments would continue for 5 more years to the beneficiary and then stop. a variable annuity does not guarantee payments for life. IBM hiring Practitioner- Policy Admin in Noida, Uttar Pradesh, India How does an indexed annuity differ from a fixed annuity? For a retired person, which of the following investments would provide the greatest protection against inflation? Your customer, still working, informs you that she will be funding a variable annuity you have recommended from 2 sources: a refinancing of her primary home where she will be able to draw out equity that has built up since it was purchased 15 years ago, and cashing out another variable annuity that she recently purchased within the past 2 years without a lifetime income rider like the one you have recommended. When the second party dies, all payments cease. D) Any time before the accumulation period. The anti-money laundering rules for insurance companies highlight that each insurance company - like other financial institutions subject to anti-money laundering program requirements - must develop a risk-based anti-money laundering program that identifies, assesses, and mitigates any risks of money laundering, terrorist financing, and other We also reference original research from other reputable publishers where appropriate. B)a majority vote from the shareholders is required to change the investment objectives. a variable annuity has which of the following characteristics A)a lifetime withdrawal benefit (LWB) or lifetime income benefit is generally in the form of a rider attached to the contract which will come at a cost to the annuitant C) III and IV. This recommendation is: D) unsuitable because her situation exposes her to surrender charges and early withdrawal penalties in exchange for insufficient benefits. Periodic payments are not a consideration because normally the payments into an annuity are level or in a lump sum. The $30,000 contract value represents $10,000 of contributions and $20,000 of earnings. The value of the annuity units is fixed. There are also immediate annuities, which begin paying income right away. B)Value of each annuity unit each month. They can be classified by: Nature of the underlying investment - fixed or variable D) I and IV "Variable Annuities: What You Should Know," Page 6. # 7 Annuities Flashcards | Quizlet If a 42-year-old customer has been depositing money in a variable annuity for 5 years, and he plans to stop investing but has no intention of withdrawing any funds for at least 20 years, he is holding: She will receive the annuity's entire value in a lump-sum payment. Job Classification: Corporate - Legal and Compliance. Reference: 12.2.1 in the License Exam. Variable annuity Which of the following is characteristic of fixed annuities? She will receive the annuity's entire value in a lump-sum payment. C)insurance companies keep variable annuity funds in separate accounts from other insurance products. A)variable annuities may only be sold by registered representatives. B)mutual fund units. The payout compared to the initial payout upon annuitization. D) the yield is always higher than mortgage yields. The Project Gutenberg eBook of Memoirs of Extraordinary Popular B) 100% taxable. The amount taxed is the amount of the lump-sum payment minus the deceased's cost basis in the investment. Chapter 6-Classification Annuities Flashcards | Quizlet Annuity units are units of ownership when the contract is in the payout stage. It is innate and universal. The annuity unit's value represents a guaranteed return. D)It cannot be determined until the April return is calculated. Question #15 of 48Question ID: 606804 An annuity factor is taken from the annuity table, which considers, for example, the investor's sex and age. Variable Annuities | Investor.gov The distribution of questions by topic is not intended to represent the 39) A variable annuity has the following guarantees: [PDF] Understanding your variable annuity UBS Variable annuities are long-term investment vehicles that with these securities as well insurance company and do not apply to the investment *Under the mortality guarantee, the insurance company assumes mortality risk by guaranteeing payments for life, though the amount of each payment is not guaranteed. Question: The following are characteristics of a public conglomerate: I) It is designed to operate various divisions for the long run. *A periodic payment immediate annuity is a contradiction in terms. A variable annuity is a long term investment issued by an insurance company that can help you grow your money, take income in retirement and pass on your wealth. B) The death benefit cannot ever be more than the guaranteed benefit. She may choose to receive monthly payments for the rest of her life. 2019 Ted Fund Donors D) A 10% penalty plus the payment of ordinary income tax on funds withdrawn in excess of the owner's basis. *Annuity death benefits are generally paid in a lump sum. can be sold by someone with only an insurance license Your 55-year-old client invested $50,000 four years ago in a nonqualified variable annuity. B)Tax-free municipal bonds A)Fixed annuity contract with a discussion regarding purchasing power risk Your customer, still working, informs you that she will be funding a variable annuity you have recommended from 2 sources: a refinancing of her primary home where she will be able to draw out equity that has built up since it was purchased 15 years ago, and cashing out another variable annuity that she recently purchased within the past 2 years without a lifetime income rider like the one you have recommended. Question #40 of 48Question ID: 606800 B)I and IV. . *Contributions to a nonqualified annuity are made with the owner's after-tax dollars. B)II and III. The features of variable deferred annuities are many. B) The death benefit cannot ever be more than the guaranteed benefit. A)II and IV. Immediate annuities purchase annuity units directly. Which of the following is NOT associated with characteristics of shares They are also not considered suitable for anyone who anticipates needing a lump sum within a short time frame to fund other endeavors. C)such an annuity is designed to combat inflation risk. A)the number of annuity units becomes fixed when the contract is annuitized. An ordinary simple annuity has the following characteristics: For example, most car loans are ordinary simple annuities where payments are. C) The investor's concerns about taxes. The following are the characteristics or the hierarchy of a trend except A. Gigatrends C. Megatrends B. Macrotrends D. Nanotrends _____11. D) not suitable because a lifetime income rider is only for someone who is already retired. C) II and IV. Question #36 of 48Question ID: 606805 During the accumulation phase, the number of accumulation units will increase as additional money is invested. A customer has a nonqualified variable annuity. \hspace{7pt} a. December 303030, to record the payroll. B) a variable annuity contract is not required to be sold by prospectus because it is an insurance contract Reference: 12.1.2 in the License Exam, Question #21 of 48Question ID: 606812 \hspace{10pt} \text{Warehouse salaries} & 110,000 & \hspace{10pt} \text{Social security tax withheld} & 51,714\\ A variable annuity is a type of annuity contract, the value of which can vary based on the performance of an underlying portfolio of sub accounts. D) A 50 year old individual with $50,000 cash to invest who has already made the maximum contributions to an IRA and the 401(k) plan at his place of employment and would like to minimize some of the tax consequences of his currently high tax bracket. a variable annuity guarantees payments for life. Solved 6. Which of the following is not a characteristic of | Chegg.com A rider or statement of condition that allows a variable life insured to maintain policy coverage after becoming disabled is a benefit known as D) I and III. D) an accounting measure used to determine the contract owner's interest in the separate account. Can I Borrow from My Annuity for a House Down Payment? Your customer is interested in a variable annuity but is unclear on some of the details regarding different specifications and riders that can be attached to the contract. B)I and III. Reference: 12.3.3 in the License Exam. A) Dow Jones Industrial Average. A) changes in common stock prices tend to be more closely related to changes in the cost of living than changes in bond prices. A 45-year-old employed individual with no other retirement accounts in place Question #26 of 48Question ID: 606811 Refinancing a home to draw out equity has been identified by FINRA as an abusive sales tactic regarding the sales of VAs. What are the characteristics of fixed annuities? - InsuranceQnA The number of accumulation units is always fixed throughout the accumulation period. B) fixed in value until the holder retires. Every annuity has some characteristics in common. Reasonable accommodations may be made to enable individuals with disabilities to perform the essential functions. Reference: 12.3.3 in the License Exam. must precede every sales presentation. Hire Velocity hiring Customer Escalation Agent in Tampa, Florida B)fixed in value until the holder retires. A) A variable annuity
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